(a)      (1)      (i)      For the purpose of providing funds for the design, construction, reconstruction, establishment, extension, enlargement, purchase or condemnation of the water and sewerage systems in the sanitary district, or in any other areas where extension of any of those systems may be authorized by law, or for the construction, remodeling, enlargement or replacement of any office or operating building or buildings required for the administration or operation of any of the systems, including the acquisition of land or equipment, the WSSC may issue bonds of the sanitary district, from time to time, in such amounts as it may deem necessary to carry on its work.

                  (ii)      Subject to subsection (f) of this section, for the purpose of providing funds for the acquisition or purchase of capital equipment including maintenance field and yard equipment, trucks, fleet vehicles, computer equipment, telecommunication equipment, office equipment, and laboratory equipment, the WSSC may issue bonds of the sanitary district, from time to time, in such amounts as it may deem necessary to carry on its work.

                  (iii)      Bonds hereafter issued under this section shall be serial bonds with the principal of any given issue payable annually, commencing not more than 3 years from the date of issue of the bonds.

                  (iv)      The bonds may be either registered or coupon bonds, or registerable as to principal with interest represented by coupons and issued in such denomination or denominations as shall be determined by the WSSC, shall bear interest as provided in § 4-104 of this subtitle payable semiannually and shall mature no later than 40 years after the date of issue of the bonds.

                  (v)      All bonds of the sanitary district or of the WSSC, including those heretofore issued, shall be forever exempt from taxation by the State of Maryland and by the counties and municipalities in the State.

                  (vi)      Any bonds hereafter issued by the WSSC in its name or in the name of the sanitary district may be made redeemable before maturity at the option of the WSSC, at such price or prices and under such terms and conditions as may be fixed by the WSSC prior to the issuance of such bonds.

            (2)      (i)      In this paragraph, "bonds" means bonds, notes, and other obligations.

                  (ii)      Notwithstanding any provision of law to the contrary, including, without limitation, this article, Article 31 of the Code, and the State Finance and Procurement Article, the WSSC may issue bonds, notes, and other obligations that have a maturity at the date of issue of more than 1 year, as fully registered bonds without coupons in a form that the WSSC deems necessary or desirable for the purposes of:

                        1.      Qualifying the interest on the bonds for exemption from federal income tax; and

                        2.      Conforming to standards and practices for the registration and transfer of bonds generally followed by banks and trust companies acting as registrars and transfer agents of bonds. These standards and practices include signing of bonds by facsimile signatures of WSSC officers, authentication of bonds by the manual signature of any officer of any bank or trust company signing as the registrar or transfer agent, maintenance by registrars or transfer agents of records of owners of bonds, complying with the standard record date system for payment of interest, issuing bonds on the basis of book entries and certificates, and complying with requirements for the form of bond that is acceptable to central depositories used in the marketing and trading of municipal bond issues.

      (b)      They shall be issued under the hand and seal of the WSSC and shall be guaranteed as to payment of principal and interest by the County Councils of both Montgomery and Prince George's counties, which guaranty shall be endorsed on each of the bonds in the following language: "The payment of interest when due and the principal at maturity is guaranteed by Montgomery and Prince George's counties, Maryland". The bonds of the sanitary district shall be signed by the chairman and the secretary and the treasurer of the WSSC or, if the WSSC shall so provide, by any 2 of its members and the official seal of the WSSC shall be impressed upon the bonds. However, the WSSC may authorize any of its officials to sign the bonds with his facsimile signature. Also, the WSSC may authorize a facsimile of the official seal of the WSSC to be imprinted on the bonds, in which case it shall not be necessary that the official seal be impressed physically upon the bonds. The guaranty or endorsement by the County Council shall be signed on each of the bonds on behalf of each county by the County Executive or by any officer designated for that purpose by the County Executive, by his facsimile or manual signature as the County Executive shall determine, within 20 days after the bonds are presented by the WSSC for the signing of the endorsement. In the event of any liability under the above guaranty, the liability for each county shall be in whatever proportion as the assessable basis of that part of either county within the sanitary district bears to the assessable basis of the whole of the sanitary district. Notwithstanding the foregoing provisions of this subsection, the WSSC may, at its option and pursuant to the provisions of § 4-103 of this subtitle, waive the guarantee of the counties above provided for.

      (c)      As to any bonds issued under the provisions of this section for the purpose of providing funds for the construction, remodeling, enlargement or replacement of any office or operating building or buildings, the WSSC shall annually determine the amount necessary to meet the principal and interest requirements of such bonds, and shall set aside annually for such purpose so much of the receipts from water service charges, sewer usage charges, house connection charges and any other charges imposed by the WSSC as the WSSC shall determine to be fair and equitable to be so set aside, and the amounts of such receipts so set aside shall be deducted from the amount which the WSSC has determined to be necessary to be raised by direct taxation under the provisions of § 4-105 of this subtitle, upon certification to the County Council of Montgomery County and the County Council of Prince George's County.

      (d)      The County Executive of Montgomery County or the County Council or County Executive of Prince George's County may at any time in person or by either of their duly authorized agents, audit and examine the books and records of the WSSC; provided, however, that such audit or examination shall be without cost to the WSSC.

      (e)      (1)      In this subsection, "bond" means any debt instrument issued by the WSSC as part of a bond issue that will not reach full maturity within 5 years from the date of issue.

            (2)      (i)      Subject to paragraph (3) of this subsection, the aggregate principal amount of bonds outstanding at any time, whether issued under this section or under any other provision of law, may not exceed the larger of:

                        1.      The sum of 3.8 percent of the total assessable base of all real property assessed for county taxation purposes within the sanitary district and 7.0 percent of the total assessable personal property and operating real property described in § 8-109(c) of the Tax - Property Article assessed for county taxation purposes within the sanitary district; or

                        2.      The sum of 3.8 percent of the assessable base of all real property assessed for county taxation purposes within the sanitary district as of July 1, 1997 and 7.0 percent of the total assessable personal property and operating real property described in § 8-109(c) of the Tax - Property Article assessed for county taxation purposes within the sanitary district as of July 1, 1997.

                  (ii)      The maximum debt level authorized under this subsection shall apply to any bond issued under an enabling act of the General Assembly of Maryland enacted on or after July 1, 1997, unless the enabling act specifically exempts the bond by reference to or modification of this subsection.

            (3)      (i)      In this paragraph, "government obligation" means:

                        1.      A direct obligation of the United States of America; or

                        2.      An obligation, the timely payment of principal of and interest on which is unconditionally guaranteed by the United States of America.

                  (ii)      In calculating the maximum debt authorized under this section, the aggregate amount of bonds outstanding shall be reduced by:

                        1.      Any amount held in the joint sinking fund account for the payment of principal of the bonds; and

                        2.      The amount of any bond for which there has been irrevocably deposited cash or government obligations maturing as to principal and interest at times and in amounts sufficient to provide adequate and complete payment of the principal or redemption price and interest as required on the bond.

      (f)      As to bonds issued under subsection (a)(1)(ii) of this section, in addition to the conditions and limitations otherwise provided in this section:

            (1)      The bonds may be issued only to finance the acquisition or purchase of equipment with a useful life of 4 to 7 years, that WSSC expects to finance over a period of 4 years or less, and for which WSSC shall budget accordingly;

            (2)      The principal of any given bond issue shall be payable annually starting not more than 1 year after the date of issue of the bonds;

            (3)      The bonds shall mature not more than 4 years after the date of issue of the bonds; and

            (4)      The aggregate amount of bonds outstanding at any time may not exceed $15,000,000, subject to annual upward adjustment in accordance with the consumer price index - all urban consumers (CPI-U), for the Washington, DC-MD-VA metropolitan area, over the base year 1997.